fixed income. some of the january flows from trim tabs globely showed there's still money going in, but a lot more money in stocks, and recently i think maybe money is coming out. you know, i think at the enof the day, i agree with the last guest, we did reach an infliction point. how much is it worth? won't see a 138 low historic yield in a ten-year again but doesn't mean we won't see 160, 170 or 110 again, once again, if you ignore all the bad things, if your kid gets two ds, a b and "a" and ignore the bad grades, definitely a better student. spent $300 billion plus of deficit spending in the fourth quarter, and it generated a minus 0.1% of 1%. you do the math. >> that's a good point. let me give your take, ethan on what to expect from the next market mover, that, of course, the jobs report. what are you looking for? >> we'll do okay in the jobs report. looking for 130,000 gain on friday, a little bit weaker than

what we were seeing in the second half of last year. i want to add to the conversation we're already having on the outlook for the markets. we haven't felt the impact of fiscal tightening yet. we're going to have to watch the consumer very closely. we'll be having pretty big government spending cuts with the sequester. i think we need to be a little cautious in the first half of this year. this won't be a linear rally in the stock market. the first half is going to face some pretty big headwinds from the economy, so i'm cautious about the next few months here. >> cautious about the next few months, so does that translate into taking money out of stocks? is this rally that we've been seeing, even though we saw fractionial losses today, is it justified given these expectations that you think the economy turns downward? >> i think if you look just at the earnings picture and ignore what's going on in washington, the markets should be up even more. i mean, there's plenty of room for stocks to rally, and i do think once we get past this miss

call austerity the rally will resume. we have to keep in mind that the market up until now has not seen really weak data, and it's about see some very soft consumption numbers. have you a $200 billion tax increase this year and a $110 billion sequester. these are not small fiscal tight things. it means that first and second quarter are going to be very weak. it's no longer going to be talking about the risks of the fiscal cliff. we're actually getting about half of the fiscal cliff, so i think you're supposed to be cautious for the next few months. >> and that's not necessarily what we're seeing in investor behavior right now, margie. the same question for you. is this justified given the fact that we are headed into the next couple of months where things will get tougher? we know that we're garnishing defense cuts coming. we know that the fourth quarter was weak because everybody was in lockdown moved. do you want to lighten up on stocks, or not? >> may have a few little bumps in the road.

frankically i welcome government spending cuts. i think that would be very positive long term. when you look at way from the government and look at what companies are doing, company results. global competitiveness, hard to get discouraged especially when they are cash flow yields. the opposite of the pes are really better than what you would get in the bond market with the 7% earnings yield. you don't have to think long to know that that's the place to real put your money. >> rick santelli, how do you think this plays out? >> i think belt-tightening is good. we can't artificially try to get rid of all of the hiccups. the recessions and the turndowns. i think we need to let the capital get reallocated by the private sector, and i do think the tax increase -- you know, think back to candidate romney. he said if you let these taxes go up you'll lose hundreds of thousands of jobs. i think in hindsight he's proven to be somewhat correct. >> yeah. we'll keep watching in terms of what the job numbers say post these defense cuts. you think we're going to get a

big cut in defense and that will mean layoffs? what about defense stocks? >> yeah. i think when you look at the complexion of the fiscal conservatives and how small of an appearance they have in the two houses and, of course, none in the white house, that the sequester represents the only spending cuts they are going to be able to tactically do, and i think it has to be perceived in that way. >> isn't it interesting, eric, that at this point we're really not talking about the dysfunction in washington as much as we were even though we do have the debt ceiling fight on the horizon. that's taken a back seat to this momentum in stocks. >> yeah, absolutely. i think that investors should be braced for a potential pullback, but trying to trade it i think is perilous. look, would i have expected a fairly significant pullback in december based on the uncertainty of the fiscal cliff debate. it didn't happen. i think that we were at that time telling our clients to look through the potential weakness and focus on the value and the fact that equities are very likely to be higher in a year

from now, concentrate on the longer run, invest, don't trade and we think you'll be well served by that. >> give me your best idea right here then, eric. >> well, i think equities. simply the equity trade. >> what do you remember want to do, etfs, my spector sectors, etfs, how do you do it? >> very broadly. we're an active manager and use a multi-manager approach so we're broadly diversified across countries. emerging markets looks better than developed and procyclical stocks look better in general. >> we've got the facebook numbers out, guys. 17 cents a share is the number we're getting on revenue of $1.59 billion. the estimates called for a profit of 15 cents. 15 cents is the estimate and actually a beat of 17 cents a share for the actual. revenue coming in at 1.59 billion verse an estimate of 1.93 bill crop. want to get reaction now.

julia boorstin digging through the numbers, she's going to let us know what she gets as she continues to look through this press release right out of facebook. what's your reaction to the facebook numbers? >> i would say honestly it's a pleasant surprise, a meaningful beat on the consensus number. my estimate was a bit below consensus. when you saw was facebook's ad revenues went from a million per day to 3 million per day at the end of the quart, a $1 billion annual run rate. i was skeptical as to whether they could continue through that acceleration through the fourth quarter, and what the numbers tell me they did. >> go ahead. >> i wanted to bring you some highlights of the earnings report. revenue came in at 1.15 billion, up 40% from a year ago, and expectations were revenue of 5.3

billion. mobile comprised 14% of ad revenue in the prior quarter in q3, so there's -- the headline here. there's a statement from mark zuckerberg saying we entered 2003 with good momentum and will continue to invest to achieve our mission and become a stronger, more valuable company so there's a little note there. maria, he's acknowledging some of the criticism he didn't care about the value of the company. i'll continue to dig back through these result, and we'll be back shortly. >> roger kay, jump in here on what we're hearing on mobile as well as advertising, as well as the overall earnings in the revenue. what's your take on the quarter from facebook? >> looks to me like they have actually made the corner, maria. the fact that they got their mobile advertising up to 23% of revenue is really good news. a lot of analyst were looking for numbers around 25, but 23 is

g good, up from 14. really struggling with that for a long time, and now it looks like they have the formula. i think they are just beginning to monetize the 1 billion user base that they have got, and there's lots of room to move here so i feel quite good about it now. >> so, would you put new money to work at facebook value at $28, 28.86? >> yeah, right. i think, you know, the real floor on the thing was around 20, and i think from there it's got room to go up. though, it was very, very richly priced when it first came to market, it's still below that price. it can you go g through 38 and beyond given this kind of growth momentum. >> go ahead, julia. >> interesting numbers here on facebook's user base. daily active users were 618 million on average. that's an increase of 28% year over year, but its mobile, where facebook is really showing the most growth. mobile active users were 680 million, an increase of 57% year over year. maria, this is the first time that mobile daily active users

have exceeded web daily active users for the first time so that shows a shift in facebook's user base. another couple of interesting things here, if you look at the non-advertising revenue, payment from fees came in at $256 million, quite in line with expectations, and then advertising, which is the other part of that business, that was up 84 -- i'm sorry, advertising represents 84% of total revenue but it was a 41% increase from the same quarter last year so facebook is showing growth both in advertising and in its payments business and that's the fees that it gets from games like zenga's games. >> and that's why credibility is so important, a.b. see anything in these numbers that cause concern because the stock is down 6.5% right here, even though everybody is talking about how positive this quarter looks. what is the cause for concern? >> not at all. i think the point that your other guest made about expectations might have been 25% adds revenue and came in at 23.

23 is in line with what i was expecting as i'm looking through the numbers so that tells me the core business actually outperformed as opposed to the mobile slightly missing the whisper number. the core business is just the standard -- the ads as well as they are ent e-commerce with facebook gifts which they began to emphasize more in the holiday season. >> that's supposed to be a big deal. >> and then recently graph search or a social search tool within facebook if they can change users' behavior and get people to use facebook in that way and provide a quality search experience, there's a share that will be taken from google over time. >> growth of 25% is a slowdown, some feel, so are you worried about saturation? >> the way i'm reading these -- this is more like 35% total top-line growth, which, again, a bead of consensus. maybe there was a whisper number or expectation that the mobile percentage was closer to 25 or higher, but a lot of people don't get about this stock is

that in the ads business, when dollars are allocated to mobile, many advertisers are allocating away from desktops so there is some cannibalization. some of the paid app installs, purely incremental, are beginning to gain direct. >> got to go to jon fortt, would you buy this stock at $30? >> yes. no published recommendation. >> that's fine. >> below 20x, 20.13 ebitda you can still. >> qualcomm out with earnings as well and jon fortt here with that angle. >> i know what it is, it's the operating margin. >> jon? >> big beat buyout by qualcomm. the street expected 5.9 billion in revenue, $1.13 eps and qualcomm turned in 6.02 billion and $1.26 in eps. also, guide abswell above the street for the coming quarter. just got off the phone with paul jake objection notes from what

he said. the chip set business and 3g, and 4g more than doubled quarter and out of emerging markets also doubling for them. he says he feels like they are in a good position on chip sets. the fab issues that they have had getting supply from tsmc have cleared up now and they are getting good supplies from other suppliers who they had dialed tsmc was having some issue. he said just in terms of the overall smartphone ecosystem very healthy. operators are looking for new options out there. they are operators eager for blackberry 10 but too soon to see exactly how that will fare. asked him about the tablet market, the ipad mini starting to come out with lte units getting broader geographic distribution. qualcomm chip sets not in that, but that's not pointed out quite yet. >> big move in qualcomm. thanks a lot, jon, we'll be watching that. a lot more market moves after the break. stay with us, and then it's not a some by apocalypse, it's the

refi apocalypse. some analysts say it's upon us. find out why and who is in danger next. and everybody is waiting for the great rotation from bonds to stocks, right? but it's not happening yet. coming up the bond queen alexandra lebenthal will give us her take on why bonds are doing so well and how long it will last. stay with us. [ male announcer ] at northern trust, we understand that if you pick three people, odds are they'll approach everything in their own unique way -- including investing. so we help clients identify and prioritize their life goals. taking that input and directly matching assets and risk preferences against them. the result? a fully customized plan. we call it goals driven investing. you have unique goals. how about a portfolio specifically designed to achieve them? ♪

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welcome back. no dow 14,000. bob pisani on why the market faded in the last hour. over to you, bob. >> i'll make it simple for you, maria. we have quantitative easing but no growth. that's the problem. some traders were puzzled and even angry about why we didn't see a drop in the market on the crummy numbers on the gdp. well, there was a drop but wanted to see what the fed had to say. when the fed didn't say anything new, that's when you took profits. the close made more sense to me than the open did, maria. take a look at cyclicals, market leadership groups, that's the groups that's outperformed. they were the weakest today, your industrials and energy and material stocks and transportation stocks. look at the transports there. all were notably weaker. there's your sector, and those are the ones with the biggest move up. they make the sense on the down side. home business, ryland terrific numbers, all home builders with

terrific numbers but there was profit-taking today. the problem is on the valuation. finally, maria, hold on the ten-year note there. look at that. below 2%. back to you. >> all right, bob, thank you so much. back with me is eric from russell developments and our own rick santelli. very good to see you. let me kick this off with you, eric. surprised we took a breather today? >> no, actually given the negative number on gdp expected the market to react a little more violently to the downside. i think it gives you a sense that the market feels like there is no other asset class for them to invest in and there's a little bit of a crisis fatigue. not that those things aren't things to worry about, just that worrying hasn't made money over the last year. >> that's a good point. a lot of people wrecks pecting a bigger drop, but there's so much firepower in this market. rick santelli, how do you see it? do you think we'll see a similar story when we get the jobs numbers out on friday? >> i think the jobs numbers will be spotty. i find it fascinating.

not one person has mentioned adp so the gdp moved adp off the front page and below the fold. listen, the reason we have fair value is the s&p cash, for example, closed at 4:00 eastern. the futures just closed at 4:15, and if we can show a chart s&p futures right after the cash close, they made new lows and closed within three-quarter points of the new lows. might give you something to look at for tomorrow morning. >> thanks, gentlemen. see you soon. facebook shares moving on the heels of the quarterly result. let's get to seema modi recapping the latest action in tech. >> reporter: all eyes on facebook and its earnings report. a beat on its top and bottom line. mobile active users also up. seeing the stock move lower though after hours. remember, the stock has already gained about 30% over the last three months, so perhaps we're seeing the stock higher, excuse me, but the stock is up 30% over the last three months so perhaps investors are looking at the levels right now. conference call starts at 5:00 p.m. any commentary about its

ability, of course, to monetize mobile, that is what the street is looking for. let's switch over to qualcomm, a leader in the mobile chip sideways. a big beat on its top and bottom line. raise 2013 outlook as well so we're seeing that stock move higher. aside from that, big movers in tech. interesting price action looking at amazon versus apple. apple reported disappointing earnings one week back and saw the stock sell off. last night amazon reported a quarterly profit that fell 5% and the stock a big mover in tech. amazon's consolidated segment operating income as a percentage of revenue, basically a metric used to measure profitability, came in sharply higher which basically shows that amazon is finding new ways to expand its profit margins. you can see amazon shares up roughly 5% on the day. back over to you. >> thank you so much, seema. is it panic time in the refi market? our housing guru diana olick up next on the refi window as

interest rates creep higher and later all about bonds. is alex lebenthal worried that bonds have seen their best days? bubbles and picks from her in the muni bond space. she's speaking with us exclusively next. stay with us. all stations come over to mission a for a final go. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer.

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release. company reported earnings of 17 cents per share, better than the estimate which calls for a profit of 15 cents a share. revenue coming in at 1.59 billion versus an estimate of 1.53 billion. stock immediately traded lower on the report, and it continues in the red down to about $30 even. as you can see there. mortgage rates on the rise, and if that trend continues, it could be devastating for the refi market. diana olick now with a reality check on the markets. over to you, diana. >> reporter: mortgage rates are extremely low, maria, and we have to keep that in mind when we talk about these moves. today the mortgage bankers association reported that the rate on the 30-year fixed moved up from 3.62% to 3.67%, and that caused refinances to drop 10% week to week, seasonally adjusted. just that tiny move, and remember, when i said rates are really low. the 30-year hit a record low in the first week of december, just a month ago at 3.47%. so we're not even a quarter point higher. so why did refis plummet, and if

you haven't refi'ed yet, have you already missed the boat? noted california mortgage analyst mark hanson says the door is shut on refis. in fact, he's calling it the refi apocalypse. he says rates have to fall much below the average of last year or refis will be much lower in 2013 because everyone is already refi'ed. now, the refi capital conveyor belt is powerful, he claims. a one or two-month interruption has serious macro economic consequences. for sure, this is a q1 year over year headwind to the economy and earnings for companies who rely on mortgage volume. he's talking about the big banks. but, if rates are, in fact, going higher, what about all the folks who had adjustable rate mortgages and who might get spooked by all of this and say, okay, now it's time to refi? well, that's actually only 12% of the market because so many people went into fits over the last several years. one more thing that's really important to note in this market is it's more about mortgage lending and specifically the fha

today tightening mortgage lending and raising premiums on fha loans and raising down payments for those over 625,000. that's what we should really be looking at. plenty more online at realitycheck.cbs.com. >> thank you so much. let's bring in christopher meyer of columbia business school. he joins me now on the housing market. thanks for joining us. >> yeah. good to see you, maria >> you say the window for refinancing will remain wide open, why? >> well, recent goldman sachs reports says there's more than 21 million people who are in a position to refinance, saving the least 150 bucks a month. there are lots and lots of people who haven't refinanced. a lot of those people are people with, say, less than 20% equity, underwater, even government programs are still sort of hard for, you know, many millions of people to access. >> well, i mean, what about the 21 million mortgages in a

position to benefit from refis. is this including those who are -- and does that include those u.n. water? >> the 21 million includes people who are underwater, but, you know, if we were in a normal market. if you look back in 2002, 2003, there were 35 million, 35 million new mortgages written in those two years. we're nothing approaching that. you know, you had the home builders on earlier. same sort of issue. home builders are doing great but housing starts relative to a recovery, nowhere near where they could be and that would have a much bigger effect on the market. >> so, how do you see this playing out? let's talk 2013 about the refi market. what are you expecting? >> well, i think if we can sort of make some -- make some effort in bringing down the spreads a little bit, and i think there are lots of efforts under way to do that. we see b of a starting to grow in this business a little bit, maybe citi sort of comes back in in a larger way, i think we could see significant numbers of

refinancings take place, so i'm sort of bullish on the upside in terms of trying to see more refinancings, help housing and the economy. >> okay. we'll leave it there. good to talk with you, chris. thanks so much. >> good to talk with you, maria. >> we'll see you soon, chris. >> back to the shocking number that the economy is shrinking. the market fell back today and our very own larry kudlow joins me in a few minutes along with former dallas fed vice president mctier and up next alexandra lebenthal's family built their empire on muni bonds. more on that coming up later. hi. i'm henry winkler.

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okay. [ male announcer ] with citibank's popmoney, dan can easily send money by email right from his citibank account. nice job ben. [ male announcer ] next up, the gutters. citibank popmoney. easier banking. standard at citibank. welcome back. want to show you a quick look at facebook and how it's moving in the extended hours. certainly off the lows. still looking at a decline here. the company reported earnings the fourth quarter of 17 cents a share versus an estimate of 15. revenue coming in at 1.95 billion versus an estimate of 1.53 billion. even though the numbers are better thani pected on the top and bottom line, still looking at the stock being sold in the extended hours. it has had, of course, a very strong run up in the last several months. well, it looked this week like the rotation from bonds to stock was building up a little steam. today's negative growth report threw a little monkey wrench into the ecase.

joining me is alex lebenthal, preponderance of the evidence and ceo of lebenth lebenthal-and-company. >> good to be here. obviously you don't want to see a slowdown in the economy. i did note a big part of the decline was due to defense spending, so overall we've still seen great improvement since 2008, 2009. >> so the private sector is not showing the kind of weakness that you're seeing from government. >> right, right. >> but we're going to continue to see defense cuts so it will probably show up in the next report. >> definitely, that's certainly something that i think we should look forward to. >> are you expecting recession? >> i am not. i am not. you know, i'm still looking at good numbers across the board, so local economies have generally trended up. sales reese up, tax receipts up so i'm not. >> recently we were seeing all of this money moving into stocks. what a great beginning for 2013 for equities. does that continue, and does

this represent in your mind a move out of fixed income and into stocks? everyone wants to figure out if that trade is actually gaining traction. >> it doesn't necessarily. first of all, let me say i'm actually really glad to see investors coming back into the stock market because they have obviously been very, very nervous over the last several years and i think that that shows a general confidence in the markets and in the economy. what's happening in the municipal side right now is that there's a lot of cash on the sidelines. there's a lot of nervousness about whether interest rates are going to go up, what's going to happen with tax reform and will that affect munis. as a result we've also seen that the ratio of municipalities to treasuries has actually gotten much more expensive over the last few years. you've been able to get 100%, 120% of the treasury yield in a municipal, and now that's dropped, you know, 20%, 30%. >> what do you think the impact is on munis of a shrinking economy since that's what we're seeinging?

>> obviously in a shrinking economy it's going to make local economies not do as well. that's going to be a negative for any municipal bond, but, remember, and this is something that's really important for people to bear in mind, is that every municipal bond has a backing, it has a reserve fund that's actually used to cover interest rate payments so it may be one times interest rate payments or maybe more. and you have bonds that have specific ref knew streavenue st are tight and municipalities are a small percentage overall of a budget. >> in terms of all the money you're talking about sitting on the sideline, what would be the catalyst to actually put the money to work? >> i think the catalyst will be when you see the municipal versus treasury rates go higher. i think that -- that will be the real thing. you know, i do have concerns about tax reform. i think the general consensus is that nothing will happen to munis in the debt ceiling talks, but there is a lot of talk about

tax reform having some form of tax or limit on deductions for municipalities, and i -- i definitely think that's a possibility. >> okay. so the impact is you're worried about this? >> i'm concerned. i think that everything is on the table. that's what we've heard from washington, and it's hard to make the argument for munis against the argument for charitable deductions, against the argument for mortgage deductions, so i do think it's something that people need to be cautious about. as a result if i were an investor right now, i would be investing with a shorter duration. and i've said this a lot over the last couple of years, with all the things that have gone on, i would have a professional managing my municipal money, whether it's in a mutual fund, an etf or separately managed account. >> having said that, what are your picks, a few muni picks? >> i did long picks though with a short call so the duration is small. i wanted to give people an example of what the maximum yields are that are out there. we have non-rated bond, and typically we don't sell non-rated bonds and wouldn't

normally recommend that, but as you can see, if it's showing on the screen right now, it's 100 basis points above the other bond that i have. the non-rated bond is a new california issuance in san francisco, and the rated bond is a dallas-fort worth airport authority subject to the amt. >> san francisco special tax refunding bonds, 5%. >> right. >> 4.37% yield, and you're saying that's not rated. >> right. >> and -- and the -- look at the coupon, but what you really want to look at is the yield to call, and that bond is priced to call, so that 4.37 is the yield to call in 2020 or 2022. don't remember. >> 2022. as, a-plus, subject to the amt and that's a 7.90. >> if you're not subject to the amt, then you don't pay a tax on

municipal bonds. >> it sounds like there are long-term ideas you want to be sticking with because of the yield, but at this moment in time you're concerned about washington. you're concerned about what happens with taxes, and you've got momentum in equities. >> definitely. do bear in mind that those bonds, as i mentioned, they are priced to the call, and -- and as interest rates go up, those will be less volatile. but, again, i do think that investors coming back into stocks is healthy for us across the board. >> we'll leave it there. alex, always great to have you on the program. >> thank you so much. >> president and ceo of lebenthal & co. action and reaction, now that the gdp is officially shrinking, will the fed need to do more? larry kudlows weighs in next along with bob mcteer and will the dow bounce back tomorrow and try to retake 14,000? our panel of market pros run through the key drivers tomorrow morning. back in a moment.

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for example, so as the economy shows signs of improvement, does it still make sense to keep rates at zero? cnbc contributor and former dallas reserve president bob mcteer is here with some ideas on how to keep monetary policy accommodative and let interest rates move higher. he joins us now along with our own economy and fed watcher larry kudlow. thanks for joining us. good to see you. >> thanks, maria. >> bob, your takeaway from the gdp report. some say it's not as bad as it looks but some say it's bad given it's a contraction. >> no, it's not as bad as it looks. there's really good news in it. you mentioned consumer spending. i think the best news was investment spending, both fixed and residential. it was up very nicely, and the negatives, you know, inventories go up and down, and last quarter they went up a good bit. this quarter they went down. that's not all that big a deal. i don't know what to make of the government decline, primarily military. i hope that's a timing issue and

isn't a sign of things to come in the military. >> what do you think, larry? what's your analysis here? >> i actually agree with what bob is saying or the thrust of it. when you look at gains in housing and the gains in business investment, even consumer spending, the private economy, put the government stuff, the military stuff aside, the private economy actually grew at 3.4% at an annual rate, and that's a pretty strong number, and that tells me that even if government spending comes down, as it will under the sequester scenario, the private economy can keep rising. in fact, we saw the bulk of the defense department's cut in spending this quarter. they were already prepared for it. 4/5 of the adjustment was already made. not going to see it again. therefore, i say go ahead with the sequester. let the private economy breathe. let's get spending down and a lower rate of gdp. >> yeah. i mean, that's all obviously sort of prudent thinking, larry,

but that's not what's happening, right? we continue to see this fight over spending cuts. >> well, i don't know. i mean, i think the clock is ticking to march 1st, and we heard from senator harry reid yesterday that he wants to postpone and defer the sequester and put tax hikes in there. it will never pass the house. my contacts, every one of my contacts in the senate and house, maria, say the sequester is going through. >> yeah. >> and i think maybe too much on defense, okay. maybe they can adjust that. the sequester should go through. there's never a good time to cut spending in washington. these guys always find excuses. i say there's no time like now. just go ahead and do it and a gdp report like today shows the private economy can grow in that kind of environment, just like all over the world. lower spending, good for the economy. >> you're right. bob, you recently wrote a piece suggesting allowing rates to rise without tightening monetary policy. how does that work? >> well, i'm not sure it would work. at the december minutes of the

last fomc meeting or the next to the last one now, seemed to treat interest rate policy and quantitative easing separately, and the implication was we'd have lower interest rates for a lot longer than we would have continued quantitative easing. i just think the economy would be healthier if they would do the reverse of that and allow interest rates to tick up a little bit, allocate capital a little more effectively, but using quantitative easing, not let the money supply shrink. keep it growing slowly. >> do you think we are going to see a spike in rates? markets will push rates higher at some point? when would you expect rates to start moving up, bob? >> oh, well, when the economy starts showing a lot more health than it is now, and if inflation starts ticking up, i don't see either one of those things happening for another quarter or two. >> and i guess -- let me mention, maria. >> yeah, go ahead, go ahead. >> i forgot to mention a big

negative in the gdp number and that's exports and imports. they both declined. exports declined more, so it was a net negative for us, but that's a bad sign for world trade. we don't want to see world trade shrinking. >> could be a one-off though, because, remember, maria, we are becoming energy independent, and our imports of foreign oil are sinking like a stone, especially if the government would keep hands off. i'm not worried about trade-offs. can i say this, second half of this year it wouldn't surprise me if long-term rates, bond rates, go up, okay? i think bonds are way overvalued right now. i don't know if you saw the "wall street journal" this morning. here's the fed's big risk. they did some simulations internally. if and when bond rates go up and prices go down, maria, the fed is going to lose a fortune. the fed could lose as much as $150 billion to their portfolio. that would do any commercial bank in. they won't be able to give money to the treasury, and they are going to have to print more

money just to cover some of their operating expenses. that's how high a risk the fed is taking right now if bond rates go up and prices down, and you and i and bob mcteer know at some point those bond rates are going up and prices are going down. >> yeah. well, the debate is out there as far as whether or not this easy policy should come to an end at some point soon, but we'll wait for the economic data. gentlemen, thank you very much. we'll see you soon. appreciate it, bob mcteer and larry kudlow. larry, we'll see you tonight on "the dud low report." >> a down day for stocks and our panel of market watchers on what happens tomorrow morning. back in a moment. all stations come over to mission a for a final go. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one.

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welcome back. with 30 seconds on the clock, our next guests will tell us what could move the market tomorrow. quint tatro, jim key and sahaq manwelian. you are first. go ahead. >> markets break out higher. tomorrow morning, we look

forward to an initial jobless cams that came in at multiyear lows last week. one stock we'd like to highlight here is tetratech. outperformed in water an renewable energy space. the company just reported earnings this afternoon and recently broke above its consolidation zone. we look the stock at current prices. >> all right. we will leave it there. jim, you're up. 30 seconds on the clock. what's of importance tomorrow morning? >> less emphasis on u.s. data, which are still being distorted from fourth quarter events. more international. like retail sales in hong kong, to see if that region continues to accelerate out of last year's slump. consumer spending in france to see if that region is getting less bad as corporate earnings out of europe are. and the price of crude to gauge the likelihood of escalating conflict in the middle east, following the israeli air strikes. >> all right, we'll leave it there. quint, you're up.

take us home. what are you watching tomorrow? >> maria, chicago pmi jobless claims are going to be important. i think they will add more color to the weakness in gdp that we have seen. but we really believe the markets gotten way ahead of itself here and i think we're going to see a repeople that we did in 2012 and 2011, investors just need to chill out and know that there's going to be a better opportunity. we saw a reversal today. look for further weakness into february, especially as we come into the sequester in march. >> all right, see that, viewers, chill out. thank you so much, gentlemen. appreciate your time tonight. see you soon. everybody is asking today can the blackberry convince people to drop their iphones. what if i told you the real winner may be the company that doesn't even exist yet. i'll explain next. stay with us.

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call now and also ask about our 24/7 support and service. call... and lock in your rate for 12 months today. liberty mutual insurance. responsibility. what's your policy? and finally tonight, my observation on all the hype around the launch of the new blackberry 10 today. i was so looking forward to this, because like many of you, i have been long been a

blackberry loyal cyst, that is until last year when i just could not take all the service in interruptions. i was forced into the arms of the iphone. but i use the iphone exclusively for only about three months because that, too, gave me problems. there were different issues but i just k0u8d not type nearly as fast on the iphone, i would look at an e-mail, next thing i know, it's gone. we do a lot of e-mailing here. so, i succumbed to carrying around two devices. an iphone and blackberry. so, i'm hoching that the blackberry 10 will wow me enough to go back to carrying just one device. but i think that's unlikely at this point. why rely on one that has a history of issues. while i would likely upgrade to the new blackberry 10, i probably won't give up the iphone entirely. at least not yet. but blackberry learned an expensive lesson by being so late to the party. technology moves so fast that if you do not innovate, you will get lost. bill gates last week in davos told me that technology companies have to innovate at least every three years, with some kind of game-changer to

stay relevant. i'm hoping that the blackberry does very well because i happen to like the key board and it's served me well. but i recognize that the company has already given up a big share of the market. because of those like me who tried hard to stay with the blackberry. but either game it up or slit their data between two devices. tech is a slippery slope. remember the sony walkman? we all had one. and then the ipod made it virtually extinct. now we have the smartphone wars. the coolness factor being questioned at apple. wouldn't it be something it's a company we've never heard of who actually blows all of these out of the water one day? that's the american way and that's what we need to encourage and support. innovation. innovators everywhere need to be supported. that is how america stays competitive. before we go, take a look at the day on wall street. a competitive day on wall street. take a quick look at facebook. the stock is moving in the extended hours.

the dow down 44 points. nasdaq down 11. and the s&p 500 tonight, down six points. facebook on the move. first, the stock dropped 3%, then it went positive, now it's down again as you can see there. facebook now at $30 and change. that will do it for "the closing bell." thank you for being with me. hope you'll follow me on twitter and google plus. have a great night. see you tomorrow. but stay with cnbc. "fast money" begins right now. > live from the nasdaq market site in new york city's times square, i'm melissa lee. blackberry blues. is the rim reboot nothing more than lipstick on a pig or is it a perfect about face. can facebook mobilize its way back to its ipo price? trading all the after hours action. and the aubrey overhang. now that the ceo of chesapeake is retiring, what should you do

with the stock? first, we have to get straight to our top story, and that is the markets, failing to reach new highs today. between the gdp report and the fed statement, we couldn't get to 14,000. steve, at the same time, we still held on. >> we did. and, the problem is, nobody wants to believe in this rally yet everyone continues to buy this rally. so, you really have to look -- you have to be a stock picker's market. you have to buy what you really want. buy what you understand. buy the stories you believe in. and those ideas probably go higher. other than that, we're waiting to fall off this cliff and i think the air is slightly coming out of the market. that's what i saw later on. >> when the gdp number hit the tape, karen, were you surprised we were able to look past it? we did see the futures go lower and it just kind of -- as if it didn't happen. >> yeah, funny that the same information in another era, three months ago would have been a disaster. i don't know how to account for it. starting to see the volatility index speak to that.

you can probably speak much better about that than i. >> it has picked up dramatically. 7.5% today. after -- what, four out of the last five days, we've seen the vix rise. made it through 14 today, after being in the low 12s just a couple of days ago, so, this is a pretty big move, but it's also what you'd expect when we're up against an area where people are looking for a correction. >> people startled defending that gdp number right out of the gate. >> right, it was the lack of government, the drought. >> inventories, everybody. everyone jumped more over it. more so than i've ever seen in it in my life. >> it's all about what's forward. you can ignore what happened. >> that was so three months ago. >> that speaks to the complacency we have. today was the worst down day of the year, okay, we were down 39 byes. that's as bad at it's been, people. like doc just said, you had the vix that ticked up a bit. it was up 7%. what's going on here is that the

rally is getting a little long in the tooth. we did not react as badly as you would have expected with the gdp number, but yesterday we had poor consumer confidence. there's other things out there. we have the sequestration, this increase in payroll tax. don't think for a second, guys, this amazon number yesterday, the revenue miss, they saw a massive deceleration in north american sales in q-4. this is likely to continue through q-1, so, to me, at the end of the day, at 1500 here and the vix popping today, what's going on is, i think you're seeing people starting to buy protection for the first time all year long. >> right, but doc, you noted this continuous sort of rotation out of the bond market. you are noting that the tbt and tlt specifically. >> yeah. we've talked about that since mid-december. that there's been days when you've seen massive turnover of either of those etfs, the single or the double inverse, which is the tbt. and it's up about 8% this year. that's just in 2013. and the regular denominated when